---
title: "Economic impact of back-to-school shopping a matter of debate"
description: "August is prime season for buying back-to-school gear. But how much all that shopping adds to the economy is unclear."
date: "2013-08-14"
authors:
  - name: "Drew DeSilver"
    job_title: "Senior Writer/Editor"
    link: "https://www.pewresearch.org/staff/drew-desilver/"
url: "https://www.pewresearch.org/short-reads/2013/08/14/economic-impact-of-back-to-school-shopping-a-matter-of-debate/"
categories:
  - "Economic Conditions"
  - "Education"
---

# Economic impact of back-to-school shopping a matter of debate

[![backtoschool-econ1](https://www.pewresearch.org/wp-content/uploads/sites/20/2013/08/backtoschool-econ12.png)](https://assets.pewresearch.org/wp-content/uploads/sites/12/2013/08/backtoschool-econ12.png)

August -- the height (or depth, depending on your point of view) of summer -- also is prime season for buying backpacks, new shoes, gluesticks, notebooks, desk lamps, laptops and all manner of back-to-school gear. How much all that shopping adds to the economy, though, is unclear.

The National Retail Federation [estimates](http://www.nrf.com/modules.php?name=News&op=viewlive&sp_id=1626) that total back-to-school spending this summer will total $26.7 billion, or an average of $634.78 for families with school-age children. Add in the $45.8 billion the NRF predicts college students and their parents will spend, and the total back-to-school buying binge reaches $72.5 billion. Back-to-school, the federation claims, "is the second-biggest consumer spending season of the year other than the winter holidays."

Which is true, though it's a bit like saying Bing is the second-most-popular search engine after Google. We looked at several years' worth of [monthly retail sales data](http://www.census.gov/retail/) compiled by the Census Bureau, excluding certain categories (such as car dealers, home-improvement stores and gas stations) that are unlikely to see much of a back-to-school bounce. It turns out that August is typically the third-busiest month of the year for that group of retailers: Last August, for example, combined sales for the selected group were about $131 billion -- nearly $10 billion (or 8.1%) higher than the average for the first 10 months of the year, though well behind December ($186 billion) and November ($144.5 billion).

[![backtoschool-econ2](https://www.pewresearch.org/wp-content/uploads/sites/20/2013/08/backtoschool-econ21.png)](https://assets.pewresearch.org/wp-content/uploads/sites/12/2013/08/backtoschool-econ21.png)

Looking at specific retail categories, August 2012 sales were most above the January-October average at sporting goods, hobby, book and music stores (22.2%); office supplies, stationery and gift stores (13.8%); and clothing and accessories stores (11.6%). The smallest bumps were at general merchandise stores (5.5%), electronics and appliance stores (5.7%) and online and mail-order retailers (6.9%).

Last summer, the NRF estimated total back-to-school spending at $83.8 billion. The more modest actual increase of $10 billion last August suggests that, for many families, back-to-school shopping to some extent displaced other purchases.

In many states, one phenomenon related to back-to-school shopping is the "sales tax holiday" -- a few days during which (usually) specified categories of purchases are exempt from sales tax. This year, [18 states](http://www.taxadmin.org/fta/rate/sales_holiday.html), predominantly in the South, have had or plan to have such "holidays" between late July and mid-August; they're typically pitched as a break for cash-strapped families and a boost for retailers.

Economists and tax-policy experts generally have taken [a dim view of sales tax holidays](http://taxfoundation.org/article/sales-tax-holidays-politically-expedient-poor-tax-policy-2013), arguing that they're, at best, [inefficient tax relief](http://www.itep.org/pdf/salestaxholiday2013.pdf) and do little if anything to generate additional retail spending beyond what people would have bought anyway. But [a 2012 working paper](http://www.chicagofed.org/webpages/publications/working_papers/2012/wp_10.cfm) from the Federal Reserve Bank of Chicago, based on an analysis of credit-card purchase data, concluded that sales tax holidays were effective at increasing consumer spending, particularly on children's clothing and shoes (though the researchers noted that theirs was "a relatively well-to-do sample").